NEW YORK: The benchmark S&P 500 scaled another record high on Friday after an in-line inflation print signaling continued moderation in price pressures provided some relief, while a decline in chip stocks on Intel’s dour forecast weighed on the Nasdaq.
The S&P 500 notched its fourth record high this month, after closing at an all-time high for a fifth straight session on Thursday following a strong fourth-quarter US economic growth reading.
All the three major indexes are set for their third straight week of gains and 12th weekly advance out of 13.
The US Commerce Department’s report showed the personal consumption expenditure index - the Federal Reserve’s preferred inflation gauge - rose moderately in December, keeping the annual increase in inflation below 3% for a third-straight month, bolstering the case for rate cuts this year.
“Inflation is headed in the right direction and with the excellent GDP figure, it’s almost turning into a Goldilocks environment,” said Todd Morgan, chairman of Bel Air Investment Advisors.
“I think soft landing is now a consensus.” Dragging down the Nasdaq, Intel slumped 11.1% to a six-week low after forecasting that its first-quarter revenue could miss estimates by over $2 billion.
With other chip stocks Broadcom, Qualcomm and Micron Technology losing over 1% each, the Philadelphia SE Semiconductor index shed 2.3%.
The S&P 500 technology sector led sectoral losses with a 0.6% decline.
This, along with Tesla’s growth warning on Wednesday, likely deepened worries over rich valuations of heavily weighted megacap companies. Five of the “Magnificent Seven” - Apple, Microsoft, Amazon.com , Alphabet and Meta Platforms - are due to report their results next week.
Chipmaking tools maker KLA Corp also shed 5.9% following its third-quarter revenue forecast below estimates.
Of the S&P 500 companies that have reported earnings so far, 78.2% have surpassed expectations, LSEG data showed, compared with a long-term average beat rate of 67%.
A recent run in chip and technology stocks helped resurrect a Wall Street rally, which had lost steam at the year’s start after bumper gains in 2023, as investors grappled with growing uncertainty over when interest-rate cuts could arrive this year.
At 11:41 a.m. ET, the Dow Jones Industrial Average was up 95.80 points, or 0.25%, at 38,144.93, the S&P 500 was up 2.93 points, or 0.06%, at 4,897.09, and the Nasdaq Composite was down 12.62 points, or 0.08%, at 15,497.87.
Among others, American Express jumped 7.6%, hitting a record high, as the credit card firm forecast a higher-than-expected annual profit, while peer Visa declined 1.6% after the world’s largest payments processor’s tepid current-quarter revenue growth forecast.
Colgate-Palmolive rose 2.3% after the toothpaste maker posted upbeat fourth-quarter results.
Advancing issues outnumbered decliners by a 1.66-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
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